EFL supports MSMEs with smart finance, digital tools, and global ambitions

By Staff Report June 16, 2025 6:11 pm IST

MSMEs have a huge market share in the manufacturing industry. To advance the entire industry, MSMEs have to bring their best game. Leaders from Electronica Finance Limited (EFL) share insights on empowering MSMEs through tailored financial solutions, which help with digital lending and strategic initiatives to drive technology adoption.

How does your flagship “Machinery Loan” product support technology upgrades and digital transformation for small and medium manufacturers?
The Machinery Loan catalyses modernisation, enabling SMEs to adopt cutting-edge manufacturing technologies, remain competitive, and scale sustainably in a digital-first economy. EFL’s “Machinery Loan,” “One Loan,” and “Machinery Leasing” products are strategically designed to support technology upgrades and digital transformation for small and medium manufacturers (SMEs). They motivate SMEs to automate and digitise. By funding the acquisition of automated and digitally integrated machines, EFL loan and lease facilities enable manufacturers to implement Industry 4.0 technologies.

SMEs can access modern equipment, enabling them to upgrade from legacy systems to state-of-the-art technologies, thereby improving productivity and efficiency. Compliance and quality also improve, as new machinery often comes with enhanced precision, consistency, and compliance with international quality standards. This is crucial for manufacturers looking to enter export markets or meet the demands of digital supply chains so that ‘Make in India’ becomes a success.

Flexible repayment terms and tailored EMIs make it easier for SMEs to adopt advanced technologies without straining their cash flow. Options for moratorium periods and collateral-free lending can lower the barrier to entry for digital transformation.

In a globally competitive environment, access to timely and flexible finance is crucial. How does EFL ensure that MSMEs can secure funds quickly for capital expenditure (capex) and working capital needs?
To thrive in a fast-paced market, MSMEs must combine smart financial planning with accessible, tech-enabled, and tailored funding options. By selecting EFL financing solutions, they ensure agility, resilience, and competitiveness on a global scale. Leveraging specialised loan products, MSMEs can access EFL specific Machinery Loans, Equipment Finance, leasing, or Term Loans specifically designed for purchasing fixed assets. Solutions like EFL Business Loans and WCDL provide working capital, offering liquidity for day-to-day operations. Digital lending apps, such as EFL Clik, and platforms like EFL Raftaarr, make it easier for MSMEs with limited collateral or formal credit history to access funding.

What support can financial institutions provide to industry players looking to serve the global market?
Finance institutions act as strategic growth partners, providing confidence, capability, and connections along with capital. Their support can bridge the gap between local manufacturing potential and global market opportunities. We at EFL provide a range of facilities to support export-related MSMEs. This includes funding under credit guarantees to facilitate access to export credit, such as the EPCG and MOOWR schemes. We help clients avail themselves of government export incentives, duty refunds, and subsidies under various schemes. Through our global network access, we introduce clients to international banks that have partnered with EFL. Additionally, we offer working capital optimisation through tailored working capital loans linked to export orders or international purchase agreements.

What trends are you observing in MSME lending in India post-COVID, and how are these impacting your product development strategy?
Post-COVID, the MSME lending landscape in India has undergone significant structural shifts driven by digital adoption, evolving borrower behaviour and proactive government support. There has been a shift toward collateral-free lending, as cash flow stress following the pandemic led to a rise in demand for unsecured loans. Government schemes, such as the CGTMSE and the Emergency Credit Line Guarantee Scheme (ECLGS), catalysed this trend. A greater sector-specific focus also emerged, with some industries, such as healthcare, logistics, and e-commerce sellers, showing strong resilience while others struggled. This led to the creation of sector-specific lending products. Additionally, there has been a growing need for working capital flexibility, with MSMEs demanding more flexible, just-in-time financing to manage unpredictable business cycles.

What measures are in place to help first-time borrowers or young entrepreneurs in manufacturing navigate loan processes more easily?
We have introduced several measures to simplify the loan process and reduce barriers for firsttime borrowers and young entrepreneurs in the manufacturing sector. These include dedicated MSME lending products with lower eligibility criteria and flexible terms specifically designed for first-time borrowers. We also offer flexible repayment and moratorium options to ease financial pressure during the initial stages of the loan. Additionally, we use alternative data for credit assessment, incorporating GST returns, bank transaction history, and e-invoices to evaluate creditworthiness beyond traditional credit scores.

What are your strategic goals for expanding financial inclusion among MSMEs as India positions itself as a global manufacturing hub?
We are transitioning from being a transactional lender to becoming a strategic partner in our customers’ growth. Our commitment is to help MSMEs become globally competitive with modern financial tools tailored to their needs, seamless digital connectivity for faster operations and financial agility, as well as credit strategies that support resilience and enable scaling. We’re here to support customers’ journeys by enabling export-led growth opportunities, offering financial literacy and expert advisory to help with decisionmaking, designing products that fit the unique requirements of manufacturing businesses, and making access to finance easier through collateral-free and cash-flow-based lending. Our digital platforms simplify credit access, and we’re expanding our reach to serve underserved and informal MSMEs—so that no matter where customers are in their journey, they have the support to grow stronger and go further.